FINANCIAL FOOTBALL NEWS

Crystal Palace extended their longest ever stay in the Premier League, securing their 7^th successive season in the top division under Roy Hodgson despite relatively low spending of £10m.

It was a season of much the same for Crystal Palace, finishing 12^th (11^th in 2018) in the Premier League and once again exiting the League Cup at the fourth round. There was a FA Cup run to the Quarter Final with the club just missed out on a trip to Wembley.

Financially, the fact there was little change on the pitch meant there was little change off it, with large losses once again likely due to a lack of player sales.

Let’s have a look at the numbers.

Revenue Prediction

Matchday Revenue

Crystal Palace had matchday revenue of £11m in 2018 and will see minimal change in 2018 owing to having the same number of home games (21) as in 2018.

Average Premier League attendance rose slightly from 25,063 to 25,455 (2%) which may see a slight increase in matchday revenue, however, is likely to remain around £11m.

Commercial Revenue

Crystal Palace earned £15m in commercial revenue in 2018. A new kit deal with Puma (replacing Macron) and a couple of other new partnerships should see a small rise in commercial revenue to around £17m.

Broadcasting Revenue

Broadcasting revenue was £121m for Crystal Palace in 2018, 81% of their total revenue which showcases the importance of Premier League survival to the club.

Premier League distributions remained at £114m for Crystal Palace as the slight increase in prize money available compensated for their one position drop in the league table, having been shown on TV 12 times (the same as in 2018).

Crystal Palace had an improved showing in the FA Cup, making the quarter-finals having only made the third round the previous year. This should boost broadcasting revenue by around £1m to £123m.

Other Revenue

Other revenue was £3m in 2018. As we don’t know exactly what this amount comprises of, our best estimate is it will remain at this level, having also been at £3m in 2017.

Total Revenue

Based on the above, Crystal Palace should see a slight rise in revenue from £150m to £153m. Any growth will be dependent on Crystal Palace’s commercial revenue and any lucrative new deals the club managed to make.

It would be no surprise to see revenue remain the same as in 2018, given the minimal change in performance on the pitch.

Costs Prediction

Amortisation

Crystal Palace recorded amortisation of £46m in 2018 and after a summer of only one signing for a transfer fee in Kouyate (£10m), it is likely that amortisation may fall slightly to £45m based on the lack of reinvestment this year compared to previous seasons.

Wages

Crystal Palace paid wages of £117m in 2018 and are likely to see an increase in this due to the signing of bosmans Meyer and Guaita on lucrative wages.

A few departures on free transfers will offset some of these wages and therefore we expect wages to increase slightly to £120m.

Other Operating Costs

Crystal Palace recorded other operating expenses of £24m in 2018. We expect the trend of slight increases to continue and for other costs to rise to £25m.

Total Costs

Crystal Palace’s costs were £187m in 2018, and with the above predictions we expect to increase slightly but remain at a similar level at £190m.

Any rise in costs is likely to be similar to any rise in revenue and therefore their profitability (or the lack of it) will remain relatively similar.

Transfers Analysis

It was a quiet summer for Crystal Palace with Kouyate joining for £10m. Batshuayi and Ayew joined on loan while Meyer, Guaita and Sako joined as free transfers.

There were no sales in the year with Cabaye the only notable departure after his contract expired.

This net transfer spend of £10m was considerably down on their net spend of £44m in 2018 and was the lowest net spend by the club since 2013 when they were promoted, showing a tightening of the purse strings by the club.

There were minimal player sales in 2018, however a profit on player sales of £2m was recorded. In 2019 with no player sales means there shouldn’t be any such amount recorded which will negatively impact their bottom line.

Crystal Palace had significant net transfer fee debts of £38m that were due in 2018/19, showing why they had to be more conservative last year owing to previous summer transfers. Crystal Palace also owe a further £9m in transfer fees in 2020 and beyond.

Profit/Loss Predictions

Crystal Palace recorded a loss of £33m in 2018 and when accounting for the above adjustments are likely to see a similar loss in 2019 of £35m, meaning they have total losses of nearly £70m in the last two seasons which obviously isn’t a sustainable position unless their owners are willing to input serious capital, which doesn’t seem to be the case.

This shows why the club had to sell either Aaron Wan-Bissaka or Zaha in the summer as their finances needed a boost and explains why the majority of the sale to Manchester United hasn’t been reinvested. The sale of Wan-Bissaka for £50m will be realised as all profit next year which will swing Crystal Palace back to a profit if they have a similar season to the last two.

A strong start to the season and the sale of Wan-Bissaka suggest that Crystal Palace may once again be profitable in 2020.

Thanks for reading, share with a friend!